Archive for the 'Main' Category

New figures from the Council of Mortgage Lenders show that mortgage lending in 2010 came to just £136.3 billion – down 5% on 2009. This is the lowest figure since the year 2000. This news won’t come as a surprise for those who attempted to obtain a mortgage in 2010, with many applicants reporting it to be particularly difficult to secure a reasonable mortgage – especially first-time buyers.

The CML also state that they expect the Bank of England base rate to rise sooner than previously thought due to the recent figures for inflation showing the figure rising from 3.3% to 3.7%. However the CML don’t believe the base rate will go above 1% before the end of 2011, nor 2% before the end of 2012.

The nine members of the Bank of England’s Monetary Policy Committee, which decides the base rate, have made their votes for December, and the rate will be kept at 0.5% for the 21st month in a row! Recent voting results would point to the rate staying at 0.5% for the foreseeable future since only 1 member voted for a rise in the rate.

As always though, despite the low base rate, mortgage rates are still several percentage points higher, and mortgages are still relatively difficult to obtain – even for those with a spotless credit rating.

As mortgage lenders continue to be very picky about who they will lend to and how much they will lend, more and more people are resorting to renting to resolve their accommodation needs. With the best deals only available to those with 25%+ deposits, potential first time buyers, in particular, are finding it very difficult to get on to the ladder. There are also some who are deliberately waiting as property price continue to slowly fall.

Fewer people buying houses has consequently caused an increase in demand for rented properties, which has enabled landlords to increase rent levels. Rent has now increased for nine months in a row, with the average figure for October being £691.

Jeremy Lead, RICS spokesperson, said ?The lettings sector has become increasingly strong over the past nine months, in contrast to the housing market which continues to slow?. This situation is expected to continue for the next three months at least.

New figures from Halifax suggest that house prices fell by a huge 3.6% in September – the biggest monthly fall since Halifax’s records began in 1983. Despite this record fall, house prices are still 2.6% higher than this time last year, with the average house valued at just over £162,000. The figure is similar to the value of 3.1% recorded by the Nationwide for house price fall in September. Halifax did comment that low volumes of sales contribute to volatile fluctuations in house prices. They also added that the large number of houses available on the market has pushed prices down.

The Bank of England has held interest rates at 0.5% for the 18th month in a row. The hold on rates was widely expected, but there is an expectation that it won’t be long before the rate is increased in order to keep inflation in check. Frustratingly for potential house buyers, the low base rate is combined with a high level of difficulty in arranging mortgages – although it would appear this is easing in recent months.